With growing digitisation, rise in internet usage and the consequent exposure to far flung places and cultures, there is a rising desire among Indians to explore the world around them. This has led to the evolution of new travel segments such as sports, culinary, adventure, self-drive, holidays for art, history, architecture, and celebrating special occasions.
This growing trend has made India one of the fastest growing outbound travel markets in the world. Now you can see both younger and older Indians embarking on international holidays. A rise in the disposable income of the middle class and growing aspirations of a burgeoning population have fuelled this growth while ensuring that it continues in the foreseeable future.
The UN World Tourism Organisation expects that India will account for 50 million outbound tourists by 2020 up from 23 million in 2017 and a far cry from the eight million Indians travelling overseas nearly a decade back. This basically implies that in a span of three years, outbound travel from India is expected to double.
Travelling, especially overseas, is associated with uncertain events and situations. Whether you are travelling alone or with your family, a mishap such as a medical emergency or the loss of vital documents and baggage can be a difficult and expensive ordeal to face. Travel insurance gives reasonable protection in situations and we all must know and understand the various factors related to travel insurance.
As the name suggests, travel insurance is an insurance option available to manage the risks faced and losses incurred while travelling. In order to buy travel insurance, you need to pay a small one-time premium that will cover you for the duration of your travel.
There are various plan types of travel insurance – these include individual travel insurance, family travel insurance, single trip insurance and annual multi-trip travel insurance. There are also special travel insurance packages available for students relocating abroad for studies.
Travel insurance comes with numerous benefits. However, it is important to note that most of these benefits come with varying clauses and need to be specified clearly in the terms of your insurance policy.
Hospitalisation expenses: Insurance covers the expenses incurred by the insured during hospitalization for availing immediate medical assistance required on a trip abroad. Some plans also provide cashless treatment.
Personal accident: In the event of the insured meeting with an accident during the travel, insurance may compensate for hospitalization or physical disability.
Loss of passport or belongings: Insurance companies also settle claims for lost belongings - they also reimburse the insured for any expenses incurred in connection with obtaining a duplicate passport, and provide assistance in getting the same.
Financial emergency: Financial emergency faced as a result of the accidental loss of money held by the insured at any time during the trip is covered in travel insurance policies. Some plans also provide claim against credit card frauds.
Missed flight: Some policies provide reimbursement of charges incurred on missing the flight due to any unforeseen circumstance, or delay in connecting flight.
Checked-in baggage loss or delay: Travel insurance is also helpful if checked-in baggage is lost or delayed. While the loss is usually settled via a claim, reimbursement is provided on the purchase of essential goods that you might not have access to due to a delay in the arrival of baggage.
It is a good idea to make the claim as soon as the “insurance” event occurs. While the claim can be made either on the trip or after returning from the trip by submitting all the document according to the format specified in the policy, it must be made within the prescribed time limit. Another factor to consider while making a claim is the amount of deductibles. The deductible is simply the amount that the insured (the policyholder) agrees to pay in case of a claim event. The insurance company will only reimburse the cost that is over and above the deductible amount. For example: assume you have an Rs 1,00,000 policy with a deductible of Rs 20,000. Now, if you have a medical emergency that cost you Rs 15,000, then the insurance company will not reimburse this amount since it falls within the deductible limit of Rs 20,000. On the other hand, assume you have a medical emergency of Rs 50,000. In this case, the insurance company will reimburse an amount of Rs 30,000 (50,000 less 20,000) after adjusting for deductibles.
Deductible terms and conditions vary depending on the insurance provider. The primary reason why people opt for a deductible is that a higher deductible amount lowers the premium to be paid. To ensure easy claim, timely information must be given to the insurance provider and the relevant policy documents must be carried on the trip. These documents might be required for official records in the hospital, airport or passport offices for direct settlement. The insured must also inform the local police in case of theft or loss of belongings or in the event of an accident, as a copy of the first information report must be presented as evidence at the time of making a claim.
Similar to any other insurance, it is important to read the policy document carefully and understand the specifics of the policy. Holidays are meant to be an enjoyable experience, a way for you to get away from the daily humdrum of life and explore new horizons. Do not let small hiccups spoil this experience for you. Buy travel insurance to protect your holiday experience!
The author is the Co-Founder, Turtlemint